Latvia profile

Overview

In 2018 the final energy consumption (FEC) in Latvia was 4.07 Mtoe; the increase was about 20% in comparison with the year 2000. The greatest changes were in the transport sector where energy consumption increased by about 54% and the share of which in the FEC increased by about 6 percentage points to reach 27% in 2018. In the residential sector energy consumption dropped by about 13% in comparison with the year 2000 and the sector has the other greatest share in the FEC with 31% in 2018. Since 2000 the FEC in industry had increased by around 55% with a share close to 22% in 2018. 

Energy efficiency for final consumers, as measured by ODEX, improved by 33%, or 2.2% per year from 2000 to 2018. In the industry, despite the economic recession (2008-2010), there has been steady progress and larger gains than in the other sectors (3.3% per year). The financial support programs from the State and the implementation of legislation targeted at reducing heat losses from buildings had contributed to the improvement of energy efficiency in the residential sector by about 40% (average 2.8%/year). For the transport and service sectors, gains are lower (1.7% and 0.5% per year respectively since 2000).

Energy efficiency (EE) improvement is one of the top priorities of the national energy sector development which allows for the cost-effective reduction of risks associated with security of energy supply, provides sustainability, competitiveness and growth of national economy, in line with a contribution in GHG emissions mitigation. National Energy and Climate Plan (NECP) 2030 states EE as the first principle. The Latvia primary energy consumption should not exceed 5.4 Mtoe in 2020 and 4.5 Mtoe for final consumption: these values fulfill the indicative national EE target of Art.3 of Directive 2012/27/EU (EED) – 0.67 Mtoe primary energy savings in 2020. One can see (Figure 1) the actual final energy consumption in 2018 had been significantly below the indicated 2020 value. According NECP2030, the indicative 2030 values for primary energy consumption (~4 Mtoe) and final energy consumption (~3.5 Mtoe) are respectively per ~25% and per ~21% lower, compared to 2020 values. Mix of instruments are used for EE policy implementation. The co-financing of EE investments (see sectorial Tables) and energy management systems can be noted as ones of them. The current Energy Efficiency Obligation Scheme includes, up to December 2020, electricity retailers. NECP2030 considers the widening of coverage of EEOS obliged parties.

Buildings

In 2018, space heating accounted for 68% of sector’s consumption, water heating for 18% and cooking for 7%. In comparison with 2001 the share of electrical appliances and water heating has grown by respectively 1.4 and 5.5 percentage points. At the same time the share of space heating has decreased by 6.5 percentage points. While energy consumption of electrical appliances and water heating per dwelling increased since 2000 (1% and 1.6%/year respectively), space heating consumption decreased by 1.0%/year over the same period. Hence energy consumption per dwelling decreased by 0.4%/year since 2000 largely due to energy efficiency gains for space heating.

The final energy consumption of households has decreased slightly by 0.6%/year in the period 2000-2018. On the one hand, two main drivers contributed to increase energy consumption – larger homes (by 0.44 Mtoe) and changes in consumer behavior (by 0.22 Mtoe). On the other hand, energy savings (0.73 Mtoe) fully compensated the effect of the above-mentioned energy consumption drivers. As a result, the final energy consumption of residential was 0.13 Mtoe lower in 2018 than in 2000.

Energy consumption per employee increased by 5% between 2000 and 2018. To a large extent it was due to the sharp increase by 41% of electricity consumption per employee. Though electrical appliances become ever more efficient, the rapid increase in their number and diffusion of ICT in offices contributed to the growth of electricity consumption.

Buildings is one of the top priorities of the national energy efficiency (EE) policy. Mix of investment support, regulation, information measures are used. Thermal engineering of new apartment building envelopes since 1980 is characterized by continuous stringent regulations, which resulted in decrease of the specific normative energy consumption for heating: 150-200 kWh/m2/year (1980), 100-130 (1992), 70-90 (2003), 60-85 (2015), 40 (2021) kWh/m2/year. However more than 90% of total floor area of multi-apartment buildings were built before 2004. Annual average heat consumption for heating in multi-apartment buildings in 2016 was around 140 kWh per m2. It is envisaged that measures on improving EE in buildings will decrease this figure by about 15% in 2023. The Cabinet of Ministers Regulation on Energy Certification of Buildings (2013, amended 2015) introduced six energy performance classes. In April 2014 the provisions of the re-casted Directive 2010/31/EU had been included in the national Construction Standard, followed by the new Construction Standard (in force 2020). High attention to EE of buildings is paid by the National Energy-Climate Plan 2030. In 2020 new measures to promote EE in single-family buildings and to provide assistance for families with children to purchase high EE dwelling were introduced.

Transport

Road transport constitutes the greatest part of energy consumption in transport. In 2018 cars accounted for 56% of the sector’s consumption and road freight transport for 34%. From 2000 to 2018 the share of railway in transport energy consumption has decreased from 9.6% to 5.5%.

The passenger traffic grew by around 1.1%/year since 2000. The growth was mainly observed in the traffic by cars (1.6%/year) while public transport showed an opposite trend: road public transportation decreased by 0.5%/year and rail by 1.5%/year. In 2018 cars represented 84% of the traffic of passengers.

Freight transport (measured in tonne-kilometre) showed a steep increase as well in comparison with 2000 (3.4% per year). Road traffic has increased much faster than rail (6.5% per year against 1.6% per year). The share of road freight transport has increased by 19 percentage points since 2000 to reach 46% in 2018.

The energy consumption in the transport sector has increased by 2.4%/year from 0.72 Mtoe to 1.11 Mtoe. The main drivers for the increase are the growth in passenger and freight traffic (0.38 Mtoe) and shift from rail to road for freight and from public transport to cars (0.19 Mtoe). Energy saving (0.32 Mtoe) almost counterbalanced the activity effect thanks to more efficient cars and trucks.

Latvia policies promote zero/low-emission vehicles and environmentally friendly transport infrastructure. "Electromobility Development Plan 2014-2016" had been followed by "Alternative Fuels Development Plan 2017- 2020". A mix of measures is applied: investment, regulations (standards, labelling, public procurement), fiscal, information, education ones. In 2016 the cars’ annual operational tax based on specific CO2 emissions was introduced. From 2021, CO2 emissions-based taxation is applied also to light duty vehicles and EURO class based taxation is introduced for buses and duty vehicles having gross weight above 3500 kg, The country-wide electric vehicles' fast charging network is under establishment. Widening of environmentally friendly public transport use is ongoing as well. High attention to zero/low emission vehicles is paid by National Energy-Climate Plan 2030.

Industry

The energy consumption in industry increased by 2.5% per year. The consumption increase was mainly brought about by two branches: non-metallic minerals by 5.5% per year and wood and wood products by 10.3% per year; the later absorbs 56% of the energy consumption of the manufacturing sector.

Though steel production decreased considerably since 2014, the previous period revealed the positive effect of improving and replacing technologies on the unit consumption of this branch.

Since 2000 final energy consumption increased by 2.5%/year driven by a growth in activity (0.51 Mtoe) and other factors (0.26 Mtoe). Half of these effects have been offset by energy savings (0.43 Mtoe) thanks to technical improvements of the machineries and processes. The share in the final energy of 5 energy intensive branches decreased by about 18 percentage points.

A mix of investment co-financing, regulatory, information measures is used. Currently, over the 2014-2020 planning period, the energy efficiency investments in the manufacturing industry are co-financed by national operational programmes. In turn, the State Development Finance Institution ALTUM provides complementary measures.  High attention to energy efficiency in industry is paid by "National Energy-Climate Plan 2030". See also the section "Overview" regarding mandatory implementation of energy audits and energy management systems.